US Internal Revenue Service: p929--2003

8/14/2019 US Internal Revenue Service: p929--2003

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Publication 929 ContentsCat. No. 64349YImportant Changes . . . . . . . . . . . . . . . . 1Department

of theImportant Reminders . . . . . . . . . . . . . . 1Tax Rules forTreasuryIntroduction . . . . . . . . . . . . . . . . . . . . . 2Internal

Revenue Children andPart 1. Rules for All Dependents . . . . . . 2Service

Filing Requirements . . . . . . . . . . . . . 2

Should a Return Be Filed Even If

Dependents Not Required? . . . . . . . . . . . . . . 4Responsibility for ChildsReturn . . . . . . . . . . . . . . . . . . . 4

Standard Deduction . . . . . . . . . . . . . 5For use in preparingDependents Own Exemption . . . . . . . 5

Withholding From Wages . . . . . . . . . 52003 ReturnsPart 2. Tax on Investment Income

of Child Under 14 . . . . . . . . . . . . . . 6

Parents Election To ReportChilds Interest andDividends . . . . . . . . . . . . . . . . . 6

Tax for Children Under Age 14Who Have InvestmentIncome of More Than $1,500 . . . . 9

Glossary . . . . . . . . . . . . . . . . . . . . . . . 27

How To Get Tax Help . . . . . . . . . . . . . . 27

Index . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Important Changes

Filing requirements. The amount of gross in-come that many dependents with earned in-come (wages, tips, etc.) can have during theyear without having to file a return has in-creased. See Filing Requirementsin Part 1.

Standard deduction. The standard deductionfor many dependents with earned income(wages, tips, etc.) has increased. See StandardDeductionin Part 1.

Alternative minimum tax. The limit on theexemption amount for figuring the alternativeminimum tax of a child filing Form 8615 hasincreased to the childs earned income plus$5,600. See Alternative Minimum Taxin Part 2.

Lower tax rates on post-May 5 gain and qual-ified dividends. The capital gain tax rateshave been lowered for net capital gain fromsales and other dispositions of property after

May 5, 2003. In addition, qualified dividendsreceived in 2003 are taxed at the lower capitalgain rates. For details, see Publication 550, In-vestment Income and Expenses. Because ofthese changes, many of the worksheets in thispublication have been revised.

Get forms and other informationfaster and easier by: Important RemindersInternet www.irs.gov or FTP ftp.irs.gov

Third party designee. A childs parent orguardian who does not sign the childs return

FAX 7033689694 (from your fax machine) may be authorized by the person who does signthe return to answer, as a third party designee,


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any questions that may arise during the A dependent may have to file a returnprocessing of the return. This authorization also even if his or her income is below theInternal Revenue Serviceallows the parent to perform certain actions. See amount that would normally require aIndividual Forms and Publications Branch CAUTION

!your income tax package for details. Also, see return. SeeOther Filing Requirements, later.SE:W:CAR:MP:T:IResponsibility for Childs Return, in Part 1. The following sections apply to dependents1111 Constitution Ave. NW

with:Washington, DC 20224Parents election to report childs interestand dividends. You may be able to elect to

Earned income only,include your childs interest and dividends on

We respond to many letters by telephone.your tax return. If you make this election, the Unearned income only, andTherefore, it would be helpful if you would in-child does not have to file a return. See Parents

Both earned and unearned income.clude your daytime phone number, including theElection To Report Childs Interest and Divi-area code, in your correspondence.

dendsin Part 2. To find out whether a dependent must file, readthe section that applies, or use Table 1 on theSocial security number (SSN). Dependents next page.Useful Itemswho are required to file a tax return must have

You may want to see:an SSN. To apply for an SSN, file Form SS5 Earned Income Onlywith the Social Security Administration. It usually

Publicationtakes about 2 weeks to get an SSN. A dependent must file a return if all his or her

501 Exemptions, Standard Deduction, income is earned income, and the total is moreIndividual taxpayer identification numberand Filing Information than the amount listed in the following table.(ITIN). The IRS will issue an ITIN to a nonresi-

dent or resident alien who does not have and isForm (and Instructions) Marital Status Amount

not eligible to get an SSN. To apply for an ITIN, W4 Employees Withholding Allowance Singlefile Form W7 with the IRS. It usually takes

Under 65 and not blind . . . . . . . . $4,750Certificateabout 4 to 6 weeks to get an ITIN. The ITIN isEither 65 or older or blind . . . . . . . $5,900entered wherever an SSN is requested on a tax

8615 Tax for Children Under Age 14 With 65 or older and blind . . . . . . . . . . $7,050return. If you are required to include anotherInvestment Income of More Than Married*persons SSN on your return and that person

$1,500 Under 65 and not blind . . . . . . . . $4,750does not have and cannot get an SSN, enter that Either 65 or older or blind . . . . . . . $5,700persons ITIN. 8814 Parents Election To Report Childs65 or older and blind . . . . . . . . . . $6,650An ITIN is for tax use only. It does not entitle Interest and Dividends

*If a dependents spouse itemizes deductions on athe holder to social security benefits or changeSee How To Get Tax Help near the end of separate return, the dependent must file a return ifthe holders employment or immigration status

the dependent has $5 or more of gross incomethis publication for information about gettingunder U.S. law.(earned and/or unearned).these publications and forms.

Exemption. A person who can be claimed asa dependent on another persons tax return can- Example. William is 16. His mother claimsnot claim an exemption for himself or herself on an exemption for him on her income tax return.his or her own return. He worked part time on weekends during thePart 1. Rules for

school year and full time during the summer. HePhotographs of missing children. The Inter-

earned $5,600 in wages. He did not have anyAll Dependentsnal Revenue Service is a proud partner with theunearned income.

National Center for Missing and Exploited Chil-Terms you may need to know He must file a tax return because he hasdren. Photographs of missing children selected

earned income only and his total income is moreby the Center may appear in this publication on (see Glossary):than $4,750. If he were blind, he would not havepages that would otherwise be blank. You canto file a return because his total income is nothelp bring these children home by looking at the

Dependentmore than $5,900.photographs and calling 1800THELOST

(18008435678) if you recognize a child. Earned income

Unearned Income OnlyExemptionGross income A dependent must file a return if all his or her

income is unearned income, and the total isIntroduction Itemized deductionsmore than the amount listed in the following

Part 1 of this publication explains the filing re- Standard deduction table.quirements and other tax information for individ-

Unearned incomeuals who can be claimed as a dependent on Marital Status Amountanother persons tax return.

SinglePart 2explains how to report and figure theThis part of the publication discusses the filing Under 65 and not blind . . . . . . . . $ 750tax on certain investment income of children

Either 65 or older or blind . . . . . . . $1,900requirements for dependents, who is responsi-under age 14 (whether or not they can be65 or older and blind . . . . . . . . . . $3,050

ble for a childs return, how to figure aclaimed as dependents). Married*dependents standard deduction and exemptionUnder 65 and not blind . . . . . . . . $ 750(if any), and whether a dependent can claim

Definitions. Many of the terms used in this Either 65 or older or blind . . . . . . . $1,700exemption from federal income tax withholding.publication, such as dependent, earned in- 65 or older and blind . . . . . . . . . . $2,650

come, and unearned income, are defined in*If a dependents spouse itemizes deductions on a

the Glossaryat the back of this publication. separate return, the dependent must file a return ifthe dependent has $5 or more of gross income(earned and/or unearned).Filing RequirementsComments and suggestions. We welcome

your comments about this publication and yourWhether a dependent has to file a return gener-suggestions for future editions. Example. Sarah is 18 and single. Her par-ally depends on the amount of the dependentsYou can e-mail us at *[email protected]. ents can claim an exemption for her on theirearned and unearned income and whether thePlease put Publications Comment on the sub- income tax return. She received $850 of taxabledependent is married, is age 65 or older, or isject line. interest and dividend income. She did not workblind.You can write to us at the following address: during the year.

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most of his support and claim an exemption for

him on their income tax return. He received $200

taxable interest income and earned $2,750 from

a part-time job.

He does not have to file a tax return because

his total income of $2,950 ($200 interest plus

$2,750 in wages) is not more than $3,000, the

amount on line 5 of his filled-in Filing Require-

ment Worksheet for Most Dependents (shown

next).

Filing Requirement Worksheetfor Most Dependents

1. Enter dependents earnedincome plus $250 . . . . . . . . . . $ 3,000

2. Minimum amount . . . . . . . . . . . 7503. Compare lines 1 and 2. Enter

the largeramount . . . . . . . . . . 3,0004. Maximum amount . . . . . . . . . . 4,750

5. Compare lines 3 and 4. Enterthe smalleramount . . . . . . . . . 3,000

6. Enter the dependents gross(total) income. If line 6 is morethan line 5, the dependent mustfilean income tax return. If thedependent is married and his orher spouse itemizes deductions

on a separate return, thedependent must file an incometax return if line 6 is $5 or more. $ 2,950

Example 2. The facts are the same as in

Example 1 except that Joe had $600 taxable

interest income.

He must file a tax return because his total

income of $3,350 ($600 interest plus $2,750

wages) is more than $3,000, the amount on line

5 of his filled-in worksheet (shown next).

Filing Requirement Worksheet

Table 1. 2003 Filing Requirements for Dependents

If your parent (or someone else) can claim you as a dependent, use this table to see if youmust file a return.

Single dependentsWere you eitherage 65 or older orblind?

No. You must file a return if anyof the following apply.

See the definitions of dependent, earned income, and unearned income in theGlossary.

PLUS $750, or Your earned income (up to $4,500) plus $250

$1,150 ($2,300 if 65or older and blind)

The larger of: This amount:

Married dependentsWere you eitherage 65 or older orblind?

No. You must file a return if any of the following apply.

Yes. You must file a return if any of the following apply.

PLUS $750, or $950 ($1,900 if 65or older and blind)

The larger of: This amount:

Your gross income was at least $5 and your spouse files a separate return anditemizes deductions.

Your earned income was over $5,700 ($6,650 if 65 or older and blind), Your gross income was more than

Your earned income was over $5,900 ($7,050 if 65 or older and blind), Your gross income was more than

Yes. You must file a return if any of the following apply.

Your earned income was over $4,750. Your gross income was more than the larger of:

$750, or Your earned income (up to $4,500) plus $250.

Your earned income was over $4,750. Your gross income was more than the larger of:

$750, or Your earned income (up to $4,500) plus $250.

Your earned income (up to $4,500) plus $250

Your unearned income was over $1,700 ($2,650 if 65 or over and blind),

Your unearned income was over $1,900 ($3,050 if 65 or over and blind),

Your unearned income was over $750.

Your unearned income was over $750.

Your gross income was at least $5 and your spouse files a separate return anditemizes deductions.

for Most Dependents

1. Enter dependents earnedFiling Requirement WorksheetShe must file a tax return because she hasincome plus $250 . . . . . . . . . . $ 3,000for Most Dependentsunearned income only and her total income is

2. Minimum amount . . . . . . . . . . . 750more than $750. If she were blind, she would not 1. Enter dependents earned 3. Compare lines 1 and 2. Enterhave to file a return because she has unearned income plus $250 . . . . . . . . . . the largeramount . . . . . . . . . . 3,000income only and her total income is not more 2. Minimum amount . . . . . . . . . . . $ 750 4. Maximum amount . . . . . . . . . . 4,750than $1,900. 3. Compare lines 1 and 2. Enter

5. Compare lines 3 and 4. Enterthe largeramount . . . . . . . . . .the smalleramount . . . . . . . . . 3,000Election to report childs unearned income 4. Maximum amount . . . . . . . . . . 4,750

6. Enter the dependents grosson parents return. A parent of a child under5. Compare lines 3 and 4. Enter (total) income. If line 6 is moreage 14 may be able to elect to include the childs

the smalleramount . . . . . . . . . than line 5, the dependent mustinterest and dividend income on the parents 6. Enter the dependents gross filean income tax return. If thereturn. See Parents Election To Report Childs (total) income. If line 6 is more dependent is married and his orInterest and Dividends in Part 2. If the parent than line 5, the dependent must her spouse itemizes deductionsmakes this election, the child does not have filean income tax return. If the on a separate return, theto file a return. dependent is married and his or dependent must file an income

her spouse itemizes deductions tax return if line 6 is $5 or more. $ 3,350on a separate return, theEarned anddependent must file an incomeUnearned Incometax return if line 6 is $5 or more.

Age 65 or older or blind. A dependentwho is age 65 or older or blind must fileA dependent who has both earned anda return if his or her gross (total) in-unearned income generally must file a

come is more than line 7 of the following work-return if the total income is more than Example 1. Joe is 20, single, not blind, andline 5 of the following worksheet. a full-time college student. His parents provide sheet.

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Filing Requirement Worksheet age, the childs parent or guardian is responsibleOther Filing Requirementsfor Dependents for filing a return on his or her behalf.

Who Are Age 65 or Older or Blind Some dependents may have to file a tax returnSigning the childs return. If the child cannoteven if their income is below the amount that1. Enter dependents earnedsign his or her return, a parent or guardian canwould normally require them to file a return.income plus $250 . . . . . . . . . . . .sign the childs name in the space provided atA dependent must file a tax return if he or she2. Minimum amount . . . . . . . . . . . . $ 750the bottom of the tax return. Then, he or sheowes any other taxes, such as:3. Compare lines 1 and 2. Entershould add: By (signature), parent (or guardian)the largeramount . . . . . . . . . . .

1) Social security and Medicare taxes on tips for minor child.4. Maximum amount . . . . . . . . . . . 4,750not reported to his or her employer,5. Compare lines 3 and 4. Enter

Authority of parent or guardian. A parent orthe smalleramount . . . . . . . . . . 2) Uncollected social security and Medicareguardian who signs a return on a childs behalf6. Enter the amount from the following or railroad retirement taxes on tips re-

can deal with the IRS on all matters connectedtable that applies to the dependent ported to his or her employer or on with the return.Marital Status Amount group-term life insurance,

In general, a parent or guardian who doesSingle

not sign the childs return can only provide infor-3) Alternative minimum tax,Either 65 or older or $1,150mation concerning the childs return and pay theblind 4) Tax on a qualified plan, including an indi-childs tax. That parent or guardian is not entitled65 or older and blind $2,300 vidual retirement arrangement (IRA), orto receive information from the IRS or legallyMarried other tax-favored account, orbind the child to a tax liability arising from theEither 65 or older or $ 950

5) Recapture taxes, such as the tax from re- return.blindcapture of an education credit.65 or older and blind $1,900 Third party designee. A childs parent or

7. Add lines 5 and 6. Enter the total A dependent must also filea tax return if guardian who does not sign the childs return8. Enter the dependents gross (total)

he or she: may be authorized, as a third party designee, toincome. If line 8 is more than line 7,

discuss the processing of the return with the IRSthe dependent must filean income 1) Received any advance earned income as well as provide information concerning thetax return. If the dependent is credit payments from his or her employers return. The child or the person signing the returnmarried and his or her spouse in 2003, on the childs behalf must check the Yes box initemizes deductions on a separate

the Third Party Designee area of the return and2) Had wages of $108.28 or more from areturn, the dependent must file anname the parent or guardian as the designee.income tax return if line 8 is $5 or church or qualified church-controlled or-

If designated, a parent or guardian can re-more. . . . . . . . . . . . . . . . . . . . . ganization that is exempt from employerspond to certain IRS notices and receive infor-social security and Medicare taxes, ormation about the processing of the return and

Example 3. The facts are the same as in 3) Had net earnings from self-employment of the status of a refund or payment. This designa-Example 2except that Joe is also blind. He does at least $400. tion does not authorize the parent or guardian tonot have to file a return because his total income

receive any refund check, bind the child to anyof $3,350 is not more than $4,150, the amount

tax liability, or otherwise represent the childSpouse itemizes. A dependent must file aon line 7 of his filled-in Filing Requirement Work-

before the IRS. See the return instructions forreturn if the dependents spouse itemizes de-sheet for Dependents Who Are Age 65 or Older

more information.ductions on a separate return and the depen-or Blind(shown next).

dent has $5 or more of gross income (earned Designated as representative. A parent orand/or unearned).Filing Requirement Worksheet guardian who does not sign the childs return

for Dependents may be designated as the childs representativeWho Are Age 65 or Older or Blind by the child or the person signing the return on

the childs behalf. Form 2848, Power of Attorney1. Enter dependents earned Should a Return Be and Declaration of Representative, is used toincome plus $250 . . . . . . . . . . . . $3,000

designate a childs representative. See Publica-2. Minimum amount . . . . . . . . . . . . 750 Filed Even If Not tion 947, Practice Before the IRS and Power of3. Compare lines 1 and 2. EnterAttorney, for more information.the largeramount . . . . . . . . . . . 3,000 Required?

If designated, a parent or guardian can re-4. Maximum amount . . . . . . . . . . . 4,750ceive information about the childs return but5. Compare lines 3 and 4. Enter

Even if a dependent does not meet any of thethe smalleramount . . . . . . . . . . 3,000 cannot legally bind the child to a tax liability

filing requirements discussed earlier, he or she6. Enter the amount from the unless authorized to do so by the law of the state

shouldfile a tax return if either of the followingfollowing table that applies to the in which the child lives.applies.dependent . . . . . . . . . . . . . . . . 1,150

IRS notice. If you or the child receives a1) Income tax was withheld from his or herMarital Status Amount notice from the IRS concerning the childs return

Single pay. or tax liability, you should immediately inform theEither 65 or older or $1,150 IRS that the notice concerns a child. The notice2) He or she qualifies for the earned incomeblind will show who to contact. The IRS will try tocredit or the additional child tax credit. See65 or older and blind $2,300 resolve the matter with the parent(s) orthe tax return instructions to find out whoMarried

guardian(s) of the child consistent with their au-qualifies for these credits.Either 65 or older or $ 950thority.

blind By filing a return, the dependent can get a re-65 or older and blind $1,900 fund. Childs earnings. For federal income tax pur-

7. Add lines 5 and 6. Enter the total 4,150 poses, the income a child receives for his or her8. Enter the dependents gross (total) personal services (labor) is the childs, even if,

income. If line 8 is more than line under state law, the parent is entitled to and7, the dependent must filean receives that income.Responsibility forincome tax return. If the dependent If the child does not pay the tax due on thisis married and his or her spouse Childs Return income, the parent may be liable for the tax.itemizes deductions on a separatereturn, the dependent must file an Generally, the child is responsible for filing his or Childs expenses. Deductions for paymentsincome tax return if line 8 is $5 or her own tax return and for paying any tax, penal- that are made out of a childs earnings are themore. . . . . . . . . . . . . . . . . . . . . $3,350 ties, or interest on that return. If a child cannot childs, even if the payments are made by the

file his or her own return for any reason, such as parent.

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Standard Deductionof Zero

The standard deduction for the following depen-dents is zero.

1) A married dependent filing a separate re-turn whose spouse itemizes deductions.

2) A dependent who files a return for a periodof less than 12 months due to a change inhis or her annual accounting period.

3) A nonresident or dual-status alien depen-dent, unless the dependent is married to aU.S. citizen or resident at the end of theyear and chooses to be treated as a U.S.resident for the year. See Publication 519,U.S. Tax Guide for Aliens, for informationon making this choice.

Example. Jennifer, who is a dependent ofher parents, is entitled to file a joint return withher husband. However, her husband elects tofile a separate return and itemize his deductions.Because he itemizes, Jennifers standard de-duction on her return is zero. She can, however,itemize any of her allowable deductions.

DependentsOwn Exemption

A person who can be claimed as a dependent onanother taxpayers return cannot claim his or herown exemption. This is true even if the othertaxpayer does not actually claim the exemption.

Table 2. Standard Deduction Worksheet for Dependents

Use this worksheet ONLY if someone can claim you (or your spouse, if filing jointly) as adependent.

If you were 65 or older and/or blind, check the correct number of boxes below. Put the totalnumber of boxes checked in box c and go to line 1.

You

Your spouse, if claimingspouses exemption

Total boxes checked

65 or older Blind

65 or older Blind

1. Enter your earned income (defined below) plus $250. If none, goon to line 3.

2. Minimum amount.

3. Compare lines 1 and 2. Enter the larger of the two amounts here.

Enter on line 4 the amount shown below for your filing status.4.

Single or Married filing separately$4,750 Married filing jointly or qualifying widow(er) with dependent

child$9,500 Head of household$7,000

Standard deduction.5.Compare lines 3 and 4. Enter the smaller amount here. If under 65and not blind, stop here. This is your standard deduction.Otherwise, go on to line 5b.If 65 or older or blind, multiply $1,150 ($950 if married or qualifyingwidow(er) with dependent child) by the number in box c above.Enter the result here.

Add lines 5a and 5b. This is your standard deduction for 2003.

a.

b.

c.

Earned incomeincludes wages, salaries, tips, professional fees, and other compensationreceived for personal services you performed. It also includes any amount received as a

scholarship that you must include in income.

1.

2.

3.

4.

5a.

5b.

5c.

$750

a.

b.

c.

Example. James and Barbara can claimtheir child, Ben, as a dependent on their return.Example. You made payments on your income of $800 and wages of $150. He entersBen is a full-time college student who workschilds behalf that are deductible as a business $400 (his earned income plus $250) on line 1 ofduring the summer and must file a tax return.

expense and a charitable contribution. You Table 2. On line 3, he enters $750, the larger of Ben cannot claim his own exemption on hismade the payments out of your childs earnings. $400 or $750. Michael enters $4,750 on line 4.return. This is true even if James and Barbara doThese items can be deducted only on the childs On line 5a, he enters $750, the smaller of $750not claim him as a dependent on their return.return.

or $4,750. His standard deduction is $750.

Example 2. Judy, a full-time student, is sin-

gle, age 22, and not blind. Her parents can claimStandard Deduction Withholdingher as a dependent on their tax return. She has

dividend income of $275 and wages of $2,500. From WagesThe standard deduction for an individual whoShe enters $2,750 (her earned income plus

can be claimed as a dependent on another$250) on line 1 of Table 2. On line 3, she enters Employers generally withhold federal incomepersons tax return is generally limited to the$2,750, the larger of $2,750 or $750. She enters tax, social security tax, and Medicare tax fromlarger of:$4,750 on line 4. On line 5a, she enters $2,750 an employees wages. If the employee claims(the smaller of $2,750 or $4,750) as her stan-1) $750, or exemption from withholding on Form W4, thedard deduction. employer will not withhold federal income tax.2) The individuals earned income plus $250,

The exemption from withholding does not applybut not more than the regular standard de- Example 3. Amy, who is single, is claimed to social security and Medicare taxes.duction (generally $4,750).as a dependent on her parents tax return. She is

However, the standard deduction for a depen- 18 and blind. She has taxable interest income of Conditions for exemption from withholding.dent who is age 65 or older or blind is higher. $1,000 and wages of $2,000. She enters $2,250 An employee can claim exemption from with-

Certain dependents cannot claim any stan- (her earned income plus $250) on line 1 of Table holding for 2004 only if he or she meets both ofdard deduction. See Standard Deduction of 2. She enters $2,250 (the larger of $2,250 or the following conditions.Zero, later. $750) on line 3, $4,750 on line 4, and $2,250

1) For 2003, the employee had a right to a(the smaller of $2,250 or $4,750) on line 5a.Table 2. Use Table 2to figure the dependents refund of all federal income tax withheldBecause Amy is blind, she checks the box forstandard deduction. because he or she had no tax liability.blindness and enters 1 in box c at the top of

Table 2. She enters $1,150 (the number in box c 2) For 2004, the employee expects a refundExample 1. Michael is single, age 15, andtimes $1,150) on line 5b. Her standard deduc- of all federal income tax withheld becausenot blind. His parents can claim him as a depen-

he or she expects to have no tax liability.dent on their tax return. He has taxable interest tion on line 5c is $3,400 ($2,250 + $1,150).

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Dependents. An employee who is a depen- Dependent Only the parent whose tax return is used canmake the election described under Parentsdent ordinarily cannot claim exemption from

Earned incomeElection To Report Childs Interest and Divi-withholding if both of the following are true.

Gross income dends.1) The employees total income will be more

Investment incomethan the minimum standard deduction Parents are married. If the childs parents file

Itemized deductionsamount. This amount was $750 for 2003, separate returns, use the return of the parentbut may be higher for 2004. Check the with the greater taxable income.Net capital gaininstructions for the 2004 Form W4 for the

Parents not living together. If the childsNet investment incomecorrect amount.parents are married to each other but not living

Post-May 5 gain2) The employees unearned income will be together, and the parent with whom the child

more than $250. lives (the custodial parent) is considered unmar-Qualified dividends ried, use the return of the custodial parent. If theStandard deductionExceptions. An employee who is age 65 or custodial parent is not considered unmarried,

older or blind, or who will claim adjustments to use the return of the parent with the greaterTax yearincome, itemized deductions, or tax credits on taxable income.

Taxable incomehis or her 2004 tax return, may be able to claim For an explanation of when a married person

Unearned incomeexemption from withholding even if the em- living apart from his or her spouse is consideredployee is a dependent. For more information, unmarried, see Head of Household in Publica-Unrecaptured section 1250 gainsee the discussions under Exemption From tion 501.

28% rate gainWithholdingin chapter 1 of Publication 505, Tax

Withholding and Estimated Tax. Parents are divorced. If the childs parentsare divorced or legally separated, and the parent

The two rules that follow may affect the tax onExample. Guy is 17 and a student. During who had custody of the child for the greater partcertain investment income of a child under age

the summer he works part time at a grocery of the year (the custodial parent) has not remar-14.store. He expects to earn about $1,000 this year. ried, use the return of the custodial parent.He also worked at the store last summer and 1) If the childs interest, dividends, and other

Custodial parent remarried. If the custo-received a refund of all his withheld income tax investment income total more than $1,500, dial parent has remarried, the stepparent (ratherbecause he did not have a tax liability. The only part of that income may be taxed at the than the noncustodial parent) is treated as theother income he expects during the year is $275 parents tax rate instead of the childs tax childs other parent. Therefore, if the custodialinterest on a savings account. He expects that rate. (See Tax for Children Under Age 14 parent and the stepparent file a joint return, usehis parents will be able to claim him as a depen- Who Have Investment Income of More that joint return. Do not use the return of thedent on their tax return. He is not blind and will Than $1,500, later.) noncustodial parent.not claim adjustments to income, itemized de-

If the custodial parent and the stepparent are2) If the childs interest and dividend incomeductions, or tax credits on his return.

married, but file separate returns, use the returntotal less than $7,500, the childs parentGuy cannot claim exemption from withhold- of the one with the greater taxable income. If themay be able to choose to include that in-

ing when he fills out Form W4 because his custodial parent and the stepparent are marriedcome (including capital gain distributions)parents will be able to claim him as a dependent, on the parents return rather than file a but not living together, the earlier discussionhis total income will be more than $750, the return for the child. (See Parents Election under Parents not living togetherapplies.minimum standard deduction amount, and his To Report Childs Interest and Dividends,unearned income will be more than $250. later.) Parents never married. If a childs parents

did not marry each other, but lived together allFor these rules, the term child includes aClaiming exemption from withholding. To year, use the return of the parent with thelegally adopted child and a stepchild. Theseclaim exemption from withholding, an employee greater taxable income. If the parents did not liverules apply whether or not the child is a depen-must write EXEMPT in the space provided on together all year, the rules explained earlierdent.Form W4. The employee must complete the under Parents are divorcedapply.

These rules do notapply if:rest of the form, as explained in the form instruc-tions, and give it to his or her employer. Widowed parent remarried. If a widow or1) The child is not required to file a tax return

widower remarries, the new spouse is treated as(see Filing Requirementsin Part 1), orRenewing an exemption from withholding. the childs other parent. The rules explained

2) Neither of the childs parents were living atAn exemption from withholding is good for only earlier under Custodial parent remarriedapply.the end of the tax year.one year. An employee must file a new Form

W4 by February 15 each year to continue theexemption. Which Parents Parents ElectionReturn To Use

To Report ChildsIf a childs parents are married to each other and

Part 2. Tax on file a joint return, use the joint return to figure the Interest and Dividendstax on the investment income of a child underInvestment Income 14. The tax rate and other return informationYou may be able to elect to include your childs

from that return are used to figure the childs taxinterest and dividend income (including capitalof Child Under 14 as explained later under Tax for Children Undergain distributions) on your tax return. If you do,

Age 14 Who Have Investment Income of Moreyour child will not have to file a return.Terms you may need to know Than $1,500.

You can make this election for 2003 only if all(see Glossary):the following conditions are met.

Parents Who Do Not File a JointAdjusted gross income 1) Your child was under age 14 at the end ofReturn2003. (A child born on January 1, 1990, isAdjustments to incomeconsidered to be age 14 at the end ofFor parents who do not file a joint return, the

Alternative minimum tax2003; you cannot make the election forfollowing discussions explain which parents tax

Capital gain distribution this child.)return must be used to figure the tax.

Page 6


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2) Your child is required to file a return for However, if your child received qualified divi- If your child received qualified dividends, the2003 unless you make this election. dends, capital gain distributions, or Alaska Per- amount of these dividends that is added to your

manent Fund dividends, see chapter 3 of income must be reported on lines 9a and 9b of3) Your child had income only from interest

Publication 550, Investment Income and Ex- Form 1040. You do not include these dividendsand dividends (including capital gain distri-

penses, for information about how to figure the on line 6 of Form 8814 or on line 21 of Formbutions and Alaska Permanent Fund divi-

limit. 1040.dends).

Use the following worksheet to figureAlternative minimum tax. If your child re-4) The dividend and interest income was lessthe amount to report as qualified divi-ceived tax-exempt interest from a private activitythan $7,500.dends on Form 1040, lines 9a and 9b,bond, you must determine if that interest is a tax

5) No estimated tax payments were made for and the amount to report on Form 8814, line 6.preference item for alternative minimum tax2003 and no 2002 overpayment was ap- (The worksheet is needed to divide the $1,500(AMT) purposes. If it is, you must include it withplied to 2003 under your childs name and base amount on line 5 of Form 8814 betweenyour own tax preference items when figuringsocial security number. the childs qualified dividends, capital gain distri-your AMT. For more information, get the instruc-

butions, and other interest and dividend in-tions for Form 6251, Alternative Minimum6) No federal income tax was taken out ofcome.)TaxIndividuals.your childs income under the backup with-

holding rules.Reduced deductions or credits. If you use

Worksheet for Childs Qualified DividendsForm 8814, your increased adjusted gross in-7) You are the parent whose return must beand Capital Gain Distributionscome may reduce certain deductions or creditsused when applying the special tax rules

(Keep for your records)on your return, including the following.for children under age 14. (See WhichParents Return To Use, earlier.)

1) Deduction for contributions to a traditional 1. Enter the amount of qualifiedThese conditions are also shown in Figure 1. individual retirement arrangement (IRA). dividends included on Form

8814, line 2 . . . . . . . . . . . . .How to make the election. Make the election 2) Deduction for student loan interest.

2. Enter the amount fromby attaching Form 8814 to your Form 1040 or

Form 8814, line 3 . . . . . . . . .3) Itemized deductions for medical expenses,Form 1040NR. (If you make this election, you

3. Enter the amount fromcasualty and theft losses, and certain mis-cannot file Form 1040A or Form 1040EZ.) At- Form 8814, line 4 . . . . . . . . .cellaneous expenses.tach a separate Form 8814 for each child for

4. Divide line 1 by line 3. Enterwhom you make the election. You can make the 4) Total itemized deductions. the result as a decimal . . . . .election for one or more children and not for 5. Divide line 2 by line 3. Enter5) Personal exemptions.others. the result as a decimal . . . . .

6) Credit for child and dependent care ex- 6. Base amount . . . . . . . . . . . . $ 1,500penses. 7. Subtract line 6 from line 3 . . .Effect of Making

8. Multiply line 7 by line 4.the Election 7) Child tax credit.Include this amount on lines9a and 9b of Form 1040 . . . .8) Education tax credits.The federal income tax on your childs income

9. Multiply line 7 by line 5.may be more if you make the Form 8814 elec- 9) Earned income credit. Include this amount ontion.

Schedule D, line 13,Penalty for underpayment of estimated tax. column (f), or on line 13aRate may be higher. If you use Form 8814,

of Form 1040 . . . . . . . . . . . .If you make this election for 2003 and did notthe childs income may be taxed at a higher rate10. Add lines 8 and 9 . . . . . . . . .have enough tax withheld or pay enough esti-on your return than it would be on the childs own11. Subtract line 10 from line 7.mated tax to cover the tax you owe, you may bereturn.

Enter the result here and onsubject to a penalty. If you plan to make thisFor example, if your child received qualified

Form 8814, line 6 . . . . . . . . .election for 2004, you may need to increase yourdividends or capital gain distributions, you may 12. Enter the childs post-May 5federal income tax withholding or your estimatedpay up to $37.50 more tax if you make thiscapital gain distributions, if anytax payments to avoid the penalty. Get Publica-election instead of filing a separate tax return for 13. Divide line 12 by line 2. Entertion 505 for more information.the child. This is because the tax rate on the the result as a decimal . . . . .

child1s income between $750 and $1,500 is 14. Multiply line 9 by line 13.10% if you make this election. However, if you Figuring Childs Income Include this amount onfile a separate return for the child, the tax rate Schedule D, line 13,

Use Part Iof Form 8814 to figure your childsmay be as low as 5% because of the preferential column (g), or on Forminterest and dividend income to report on yourtax rates for qualified dividends and post-May 5, 1040, line 13b . . . . . . . . . . .return. Only the amount over $1,500 is added2003, capital gain distributions (8% on qualifiedto your income. This amount is shown on line 65-year gain).of Form 8814. Include this amount on line 21 of On the dotted line next to line 6, Form 8814,

Deductions you cannot take. By making the Form 1040 or Form 1040NR. If you file more write QD and the amount from line 8 of theForm 8814 election, you cannot take any of the than one Form 8814, include the total amounts worksheet. On the dotted lines next to lines 9afollowing deductions that the child would be enti- from line 6 of all your Forms 8814 on line 21. In and 9b, Form 1040, write Form 8814 and thetled to on his or her return. the space next to line 21, write Form 8814 and amount from line 8 of the worksheet.

the total of the line 6 amounts.1) The higher standard deduction for a blindCapital gain distributions. Enter on line 3 ofchild. Note. The tax on the first $1,500 is figured in Form 8814 any capital gain distributions your

Part II of Form 8814. See Figuring Additional2) The deduction for a penalty on an early child received. The amount of these distributionsTax, later.withdrawal of your childs savings. that is added to your income must be reported

on line 13 of Schedule D (Form 1040) or, if you3) Itemized deductions (such as your childs Qualified dividends. Enter on line 2 of Formare not required to file Schedule D, on line 13a ofinvestment expenses or charitable contri- 8814 any ordinary dividends your child received.Form 1040. You do not include it on line 6 ofbutions). This amount may include qualified dividends.Form 8814 or on line 21 of Form 1040.

Qualified dividends are those dividends re-Deductible investment interest. If you use ported on line 9b of Form 1040, that are eligible Use the Worksheet for Childs Quali-Form 8814, your childs investment income is for the lower tax rates that apply to a net capital fied Dividends and Capital Gain Distri-considered your investment income. To figure gain. For detailed information about qualified butions, earlier, to figure the amount tothe limit on your deductible investment interest, dividends, see Publication 550, Investment In- report as capital gain distributions on Scheduleadd the childs investment income to yours. come and Expenses. D, or directly on Form 1040, and the amount to

Page 7


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report on Form 8814, line 6. (The worksheet isneeded to divide the $1,500 base amount on line5 of Form 8814 between the childs qualifieddividends, capital gain distributions, and otherinterest and dividend income.)

On the dotted line next to line 6, Form 8814,write CGD and the amount from line 9 of theworksheet. On the dotted line next to line 13,Schedule D, or in the space to the left of line 13a,Form 1040, write Form 8814 and the amountfrom line 9 of the worksheet. If there is anamount on line 14 of the worksheet, write Form

8814 and that amount (post-May 5 capital gaindistributions) in the space to the right of line 13,column (g), Schedule D, or in the space to theleft of line 13b, Form 1040.

28% rate gain. If any of the childs capitalgain distributions are reported on Form1099DIV as 28% rate gain, you must deter-mine how much to also include on line 4 of the28% Rate Gain Worksheetin the instructions forline 20 of Schedule D. Multiply the childs capitalgain distribution included on Schedule D, line13, column (f), by a fraction. The numerator isthe part of the childs total capital gain distribu-tion that is 28% rate gain. The denominator isthe childs total capital gain distribution.

Qualified 5-year gain. If any of the childscapital gain distributions are reported on Form1099DIV as qualified 5-year gain, you mustdetermine how much to also include on line 5 ofthe Qualified 5-Year Gain Worksheet in the in-structions for line 35 of Schedule D. Multiply thechilds capital gain distribution included onSchedule D, line 13, column (f), by a fraction.The numerator is the part of the childs totalcapital gain distribution that is qualified 5-yeargain. The denominator is the childs total capitalgain distribution.

Unrecaptured section 1250 gain. If any ofthe childs capital gain distributions are reportedon Form 1099DIV as unrecaptured section1250 gain, you must determine how much toinclude on line 11 of the Unrecaptured Section1250 Gain Worksheetin the instructions for line19 of Schedule D. Multiply the childs capitalgain distribution included on Schedule D, line13, column (f), by a fraction. The numerator isthe part of the childs total capital gain distribu-tion that is unrecaptured section 1250 gain. Thedenominator is the childs total capital gain distri-bution.

Section 1202 gain. If any of the childs capi-tal gain distributions are reported as section1202 gain (gain on qualified small businessstock) on Form 1099 DIV, part or all of that gainmay be eligible for the section 1202 exclusion.(For information about the exclusion, see chap-

ter 4 of Publication 550.) To figure that part,multiply the childs capital gain distribution in-cluded on Schedule D, line 13, column (f), by afraction. The numerator is the part of the childs

Figure 1. Can You Include Your Childs Income On Your TaxReturn?

Start Here

Was your child under age 14 atthe end of 2003?

No

Yes

Is your child required to file a tax return for

2003 if you do not make this election?

Yes

Was the childs only income interest anddividends (including capital gaindistributions and Alaska Permanent Funddividends)?

Yes

Was the childs income less than$7,500?

Yes

Did the child make any estimated taxpayments for 2003?

No

Did the child have an overpayment of taxon his or her 2002 return applied to the2003 estimated tax?

No

Was any federal income tax withheld fromthe childs income (backup withholding)?

No

Are you the parent whose return must beused?*

Yes

You can include your childs income onyour tax return by completing Form 8814and attaching it to your return. If you do,your child is not required to file a return.

No

No

No

Yes

Yes

Yes

No

You cannot includeyour childs incomeon your return.

*See Which Parents Return To Usetotal capital gain distribution that is section 1202gain. The denominator is the childs total capital

cluded $1,280 of ordinary dividends and a $320 bution. He has no other income and is not sub-gain distribution. Your section 1202 exclusion is ject to backup withholding. No estimated taxcapital gain distribution from a mutual fund.generally 50% of the result, but may be subjectpayments were made under his name and social(None of the distributions were reported onto a limit. See the instructions for Schedule D forsecurity number.Form 1099DIV as 28% gain, qualified 5-yearinformation on how to report the exclusion

gain, unrecaptured section 1250 gain, or section Freds parents elect to include Freds incomeamount.1202 gain.) All of the ordinary dividends are on their tax return instead of filing a return for

Example. Fred is 6 years old. In 2003, he qualified dividends. The distribution from the him. They enter $1,280 on line 2 and $320 onreceived dividend income of $1,600, which in- mutual fund was a post-May 5 capital gain distri- line 3, Form 8814.

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11. Subtract line 10 from line 7.$100 of Freds income must be included as Include the amount from line 9 of allEnter the result here and onincome on his parents tax return ($1,600 gross your Forms 8814 in the total on line 41,Form 8814, line 6 . . . . . . . . . 1,829income minus $1,500). They figure the amount Form 1040, or line 39, Form 1040NR.CAUTION

!12. Enter the childs post-May 5to report on lines 9a and 9b of Form 1040, the Check box a on Form 1040, line 41, or Form

capital gain distributions, if any 0amount to report on line 13 of their Schedule D, 1040NR, line 39.13. Divide line 12 by line 2.and the amount to report on line 6, Form 8814,

Enter the result as a decimal 0as follows. Illustrated Example 14. Multiply line 9 by line 13.Include this amount on

David and Linda Parks are married and will fileWorksheet for Childs Qualified Dividends Schedule D, line 13,separate tax returns for 2003. Their only child,and Capital Gain Distributions column (g), or on Form

(Keep for your records) Philip, is 8. Philip received a Form 1099INT 1040, line 13b . . . . . . . . . . . $ 0showing $3,200 taxable interest income and a

Form 1099 DIV showing $300 ordinary divi-1. Enter the amount of qualifieddends. All the dividends were qualified divi-dividends included on Form Linda includes $1,829 in the total on line 21dends. His parents decide to include that8814, line 2 . . . . . . . . . . . . . $ 1,280 of her Form 1040 (not illustrated) and in theincome on one of their returns so they will not

space next to that line writes Form2. Enter the amount fromhave to file a return for Philip.

8814$1,829. Adding that amount, plus theForm 8814, line 3 . . . . . . . . . 320$171 of qualified dividends, to her income in-3. Enter the amount from First, David and Linda each figure their tax-

Form 8814, line 4 . . . . . . . . . 1,600 creases each of the amounts on lines 22, 34, 35,able income (Form 1040, line 40) without regard4. Divide line 1 by line 3. 38, and 40 of her Form 1040 by $2,000. Linda isto Philips income. Davids taxable income is

Enter the result as a decimal .80 not claiming any deductions or credits that are$41,700 and Lindas is $59,300. Because her5. Divide line 2 by line 3. Enter affected by the increase to her income. There-taxable income is greater, Linda can elect to

the result as a decimal . . . . . .20 fore, her revised taxable income on line 40 isinclude Philips income on her return. (See6. Base amount . . . . . . . . . . . . $ 1,500 $61,300 ($59,300 +$171+ $1,829).Which Parents Return To Use, earlier.)7. Subtract line 6 from line 3 . . . 100

On Form 8814, Linda subtracts the $7508. Multiply line 7 by line 4. On Form 8814 (illustrated on the next page), shown on line 7 from the $3,500 on line 4 andInclude this amount on lines Linda enters her name and social security num- enters the result, $2,750, on line 8. Because that9a and 9b of Form 1040 . . . . 80 ber, then Philips name and social security num-amount is not less than $750, she enters $75 on9. Multiply line 7 by line 5. ber. She enters Philips taxable interest income, line 9. This is the tax on the first $1,500 ofInclude this amount on

$3,200, on line 1a. Philip had no tax-exempt Philips income, which Linda did not have to addSchedule D, line 13,interest income, so she leaves line 1b blank. to her income. She must add this additional taxcolumn (f), or on line 13aLinda enters Philips ordinary dividends, $300,of Form 1040 . . . . . . . . . . . . 20 to the tax figured on her revised taxable income.on line 2. Philip did not have any capital gain10. Add lines 8 and 9 . . . . . . . . . 100 The tax on her $61,300 revised taxable in-distributions, so she leaves line 3 blank.11. Subtract line 10 from line 7. come is $12,231. She adds $75, and enters the

Enter the result here and on$12,306 total on line 41 of Form 1040, andLinda adds lines 1a and 2 and enters the

Form 8814, line 6 . . . . . . . . . 0checks box a.result, $3,500, on line 4. Because Philip had

12. Enter the childs post-May 5qualified dividends, Linda must use the Work- Linda attaches Form 8814 to her Form 1040.capital gain distributions, if any 320sheet for Childs Qualified Dividends and Capital13. Divide line 12 by line 2.Gain Distributionsto figure the amount to enterEnter the result as a decimal 1.00on line 6, instead of subtracting line 5 from line 4.14. Multiply line 9 by line 13.The amount she enters on line 6 is $1,829, theInclude this amount on Tax for Children Underamount from line 11 of the worksheet. On theSchedule D, line 13,dotted line next to line 6, she writes QD$171,column (g), or on Form

Age 14 Who Havethe amount from line 8 of the worksheet. She1040, line 13b . . . . . . . . . . . $ 20 includes that amount ($171) on lines 9a and 9b Investment Incomeof her Form 1040. On the dotted line next to lines9a and 9b, she writes Form 8814$171. of More Than $1,500On Form 8814, Freds parents enter $0 on line 6

and write QD$80 and CGD$20 on thePart of a childs 2003 investment income may beWorksheet for Childs Qualified Dividendsdotted line next to line 6. Because the amount onsubject to tax at the parents tax rate if all of theand Capital Gain Distributionsline 6 is -0-, they do not include any amount from

(Keep for your records) following statements are true.Form 8814 on line 21 of their Form 1040.

1. Enter the amount of qualifiedOn Form 1040, they include $80 on lines 9a 1) The child was under age 14 at the end ofdividends included on Formand 9b and write Form 8814$80 on the 2003. (A child born on January 1, 1990, is8814, line 2 . . . . . . . . . . . . . $ 300dotted line next to each of those lines. On considered to be age 14 at the end of

Schedule D, they include $20 on line 13, column 2003; this childs investment income is not2. Enter the amount from(f), and write Form 8814$20 on the dotted taxed at the parents tax rate.)Form 8814, line 3 . . . . . . . . . 0line next to this line. They also include $20 in 3. Enter the amount from 2) The childs investment income was morecolumn (g) and write Form 8814$20 in the Form 8814, line 4 . . . . . . . . . 3,500

than $1,500.space to the right of column (g). 4. Divide line 1 by line 3. Enterthe result as a decimal . . . . . .0857 3) The child is required to file a tax return for

5. Divide line 2 by line 3. Enter 2003.Figuring Additional Taxthe result as a decimal . . . . . 0

These conditions are also shown in Figure 2.6. Base amount . . . . . . . . . . . . $ 1,500Use Part IIof Form 8814 to figure the tax on the7. Subtract line 6 from line 3 . . . 2,000 If neither parent was alive on December 31,$1,500 of your childs interest and dividends that8. Multiply line 7 by line 4. 2003, do not use Form 8615. Instead, figureyou do not include in your income. This tax is

Include this amount on lines the childs tax in the normal manner.added to the tax figured on your income.9a and 9b of Form 1040 . . . . 171

This additional tax is the smallerof: 9. Multiply line 7 by line 5.If the parent does not or cannot choose toInclude this amount on

include the childs income on the parents return,Schedule D, line 13,1) 10% x your childs gross income $750,use Form 8615 to figure the childs tax. Attachcolumn (f), or on line 13aorthe completed form to the childs Form 1040,of Form 1040 . . . . . . . . . . . . 0

10. Add lines 8 and 9 . . . . . . . . . 1712) $75. Form 1040A, or Form 1040NR.

Page 9


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Linda Parks

Philip Parks

1 1 1 0 0

0 0 0 0 0 0 0 0 0

1 1 1 1

3,200

300

3,500

1,829

2,750

75

OMB No. 1545-1128Parents Election To ReportChilds Interest and Dividends

Form 8814 See instructions below and on back.Department of the Treasury

Internal Revenue ServiceAttachmentSequence No. 40 Attach to parents Form 1040 or Form 1040NR.

How To Make the Election. To make the

election, complete and attach Form(s) 8814to your tax return and file your return bythe due date (including extensions). Aseparate Form 8814 must be filed for eachchild whose income you choose to report.

There were no estimated tax paymentsfor the child for 2003 (including anyoverpayment of tax from his or her 2002return applied to 2003 estimated tax).

General InstructionsPurpose of Form. Use this form if youelect to report your childs income on yourreturn. If you do, your child will not have tofile a return. You can make this election ifyour child meets all of the followingconditions.

There was no Federal income taxwithheld from the childs income.

The child was under age 14 at the endof 2003. A child born on January 1, 1990,

is considered to be age 14 at the end of2003.

You must also qualify. See Parents WhoQualify To Make the Election below.

The childs only income was frominterest and dividends, including capitalgain distributions and Alaska PermanentFund dividends.

The childs gross income for 2003 wasless than $7,500.

Your social security numberName(s) shown on your return

Childs social security numberChilds name (first, initial, and last)

If more than one Form 8814 is attached, check here

Childs Interest and Dividends To Report on Your Return

Enter your childs taxable interest. If this amount is different from the amounts shown on thechilds Forms 1099-INT and 1099-OID, see the instructions

1a1a

b Enter your childs tax-exempt interest. Do not include thisamount on line 1a 1b

2 Enter your childs ordinary dividends, including any Alaska Permanent Fund dividends. If yourchild received any ordinary dividends as a nominee, see the instructions

Enter your childs capital gain distributions. If your child received any capital gain distributionsas a nominee, see the instructions

Add lines 1a, 2, and 3. If the total is $1,500 or less, skip lines 5 and 6 and go to line 7. If thetotal is $7,500 or more, do not file this form. Your child must file his or her own return to reportthe income

3

1,500 00

4

Base amount

4

5Subtract line 5 from line 4. See the instructions for where to report this amount. Go to line 7below 6

Tax on the First $1,500 of Childs Interest and Dividends

750 00Amount not taxed

9

77

Subtract line 7 from line 4. If the result is zero or less, enter -0-

No. Enter $75 here and see the Note below.

Tax. Is the amount on line 8 less than $750?

8 8

Yes. Multiply line 8 by 10% (.10). Enter the result here and see the Note below.

Note: If you checked the box on line C above, see the instructions. Otherwise, include the amount from line 9 in the tax you enteron Form 1040, line 41, or Form 1040NR, line 39. Be sure to check box a on Form 1040, line 41, or Form 1040NR, line 39.

For Paperwork Reduction Act Notice, see back of form. Form 8814 (2003)Cat. No. 10750J

A B

C

The child is required to file a 2003return.

3

6

2

5

Part I

Part II

9

Parents Who Qualify To Make theElection. You qualify to make this electionif you file Form 1040 or Form 1040NR andany of the following apply. You are filing a joint return for 2003 withthe childs other parent.

You were unmarried, treated asunmarried for Federal income taxpurposes, or separated from the childsother parent by a divorce or separatemaintenance decree. You must have hadcustody of your child for most of the year

(you were the custodial parent). If you werethe custodial parent and you remarried,you may make the election on a jointreturn with your new spouse. But if youand your new spouse do not file a jointreturn, you qualify to make the electiononly if you had higher taxable income thanyour new spouse.

Caution: The Federal income tax on your childs income, including qualified dividends and capital gain distributions, may be less if you file a separate tax return for the child instead of making this election. This is because you cannot take certain tax benefitsthat your child could take on his or her own return. For details, see Tax Benefits You May Not Take on the back.

You and the childs other parent weremarried to each other but file separatereturns for 2003 and you had the highertaxable income.

(continued)

2003

QD$171

Page 10


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Parents return information not knownThe following discussions explain the paren- Parents return information not available. Iftimely. If the information needed from thetal information needed for Form 8615 and the a child cannot get the required information aboutparents return is not known by the time thesteps to follow in figuring the childs tax. his or her parents tax return, the child (or thechilds return is due (usually April 15), you can childs legal representative) can request thefile the return using estimates. necessary information from the Internal Reve-Providing Parental

You can use any reasonable estimate. This nue Service (IRS).Information (Form 8615,includes using information from last years re-

How to request. After the end of the taxLines AC) turn. If you use an estimated amount on Formyear, send a signed, written request for the infor-8615, write Estimated on the line next to themation to the Internal Revenue Service CenterOn lines A and B of Form 8615, enter the amount.where the parents return will be filed. (The IRSparents name and social security number. (If When you get the correct information, file ancannot process a request received before thethe parents filed a joint return, enter the name amended return on Form 1040X, Amended U.S.

and social security number listed first on the joint end of the tax year.)Individual Income Tax Return.return.) On line C, check the box for the parents

You should also consider getting anExtension of time to file. Instead of usingfiling status.extension of time to file the childs re-estimates, you can get an automatic 4-monthSee Which Parents Return To Use, earlier,turn, because there may be a delay in

TIP

extension of time to file if, by April 15, 2004, youfor a discussion of which parents return infor-getting the requested information.file Form 4868, Application for Automatic Exten-mation must be used on Form 8615.

The request must contain allof the following.sion of Time To File U.S. Individual Income TaxParent with different tax year. If the parent

Return. You can file a paper Form 4868 or youand the child do not have the same tax year, 1) A statement that you are making the re-can file it electronically. See the instructions forcomplete Form 8615 using the information on quest to comply with section 1(g) of theForm 4868 for details.the parents return for the tax year that ends in Internal Revenue Code and that you haveIf you have an extension, you must file thethe childs tax year. tried to get the information from the parent.childs return by August 15, 2004, unless you

ask for and are granted an additional extension. 2) Proof the child is under 14 years of ageExample. Kimberly must use her mothers(for example, a copy of the childs birthtax and taxable income to complete her Form An extension of time to file is not ancertificate).8615 for calendar year 2003 (January 1 De- extension of time to pay. You must

cember 31). Kimberlys mother files her tax re- make an accurate estimate of the tax 3) Evidence the child has more than $1,500CAUTION

!

turn on a fiscal year basis (July 1 June 30). for 2003. If you do not pay the full amount due by of unearned income (for example, a copyKimberly must use the information on her the regular due date, the child will owe interest of the childs prior year tax return or copiesmothers return for the tax year ending June 30, and may also be charged penalties. See Form of Forms 1099 for the current year).2003, to complete her 2003 Form 8615. 4868 and its instructions.

4) The name, address, social security num-ber (if known), and filing status (if known)of the parent whose information is to beshown on Form 8615.

A childs legal representative making the re-quest should include a copy of his or her Powerof Attorney, such as Form 2848, or proof of legalguardianship.

Step 1. Figuring the ChildsNet Investment Income

(Form 8615, Part I)The first step in figuring a childs tax using Form8615 is to figure the childs net investment in-come. To do that, use Part Iof Form 8615. Foran example, see the Illustrated Part I of Form8615on the next page.

Line 1 (Investment Income)

If the child had no earned income, enter on thisline the adjusted gross income shown on thechilds return. Adjusted gross income is shownon line 35 of Form 1040; line 22 of Form 1040A;or line 34 of Form 1040NR. Form 1040EZ andForm 1040NR-EZ cannot be used if Form 8615

must be filed.If the child had earned income, figure the

amount to enter on line 1 of Form 8615 by usingthe worksheet in the instructions for the form.

However, use the following worksheetif the child has excluded any foreignearned income or deducted a loss from

self-employment or a net operating loss fromanother year.

Figure 2. Do You Have To Use Form 8615 To Figure YourChilds Tax?

Was the child under age 14 at the end of 2003?

Is the child required to file a tax return for 2003?

Was the childs investment income more than $1,500?

Use Form 8615 to figure the childs tax. Attach it to thechilds return.

Note: If the childs parent* chooses to report the childsincome by filing Form 8814, the child is not required to filea tax return. Do not use Form 8615. (See Parents ElectionTo Report Childs Interest and Dividends.)

Start Here

*See Which Parents Return To Use

Yes

Yes

Yes

No

No

No

Do not useForm 8615 tofigure thechilds tax.

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Illustrated Part I of Form 8615

Carlas total income on Form 1040A, line 15,is $5,000. This total includes wages (earnedincome) of $600 reported on line 7. She hasno itemized deductions. Carlas taxableincome on Form 1040A, line 27, is $4,150.Because Carla has earned income, theworksheet in the instructions is used tofigure the amount on line 1 of Form 8615.

Carlas filled-in worksheet and Part I ofher Form 8615, with lines 1 through 5 filledin, are shown here.

Carlas total income of $5,000 (as shownon line 15 of her Form 1040A) is entered on

line 1 of the worksheet. Her earned incomeof $600 (her wages as shown on line 7 ofher Form 1040A) is entered on line 2 of theworksheet. Line 3 is the result of subtracting$600 from $5,000.

The amount from line 3 of the worksheetis entered on line 1 of Form 8615. Carla didnot itemize deductions, so $1,500 is enteredon line 2. Line 3 of Form 8615 is the resultof subtracting $1,500 from $4,400. Carlastaxable income of $4,150 (as shown on line27 of her Form 1040A) is entered on line 4of Form 8615. The smaller of $2,900 or$4,150 is entered on line 5. This is her netinvestment income.

WorksheetLine 1

1.

2.

3.

5,000

4,400

600

4,400

1,500

2,900

4,150

2,900

1 1 1 1

4 5 6 7

001 1 1

001 2 3

Carla C. Rose

George B. Rose

Enter the amount from thechilds Form 1040, line 22;Form 1040A, line 15; or Form1040NR, line 23, whicheverappliesEnter the childs earned incomeplus any amount from thechilds Form 1040, line 31, orForm 1040NR, line 30,whichever appliesSubtract line 2 from line 1.Enter the result here and onForm 8615, line 1

OMB No. 1545-0998Tax for Children Under Age 14With Investment Income of More Than $1,500

Form 8615Department of the TreasuryInternal Revenue Service

AttachmentSequence No. 33

Attach only to the childs Form 1040, Form 1040A, or Form 1040NR.

Childs social security numberChilds name shown on return

Parents social security numberParents name (first, initial, and last). Caution: See instructions before completing.

Parents filing status (check one):

Childs Net Investment Income

Enter the childs investment income (see instructions)1 1

If the child did not itemize deductions on Schedule A (Form 1040 or Form 1040NR), enter$1,500. Otherwise, see instructions

22

Subtract line 2 from line 1. If zero or less, stop; do not complete the rest of this form but doattach it to the childs return

33

4Enter the childs taxable income from Form 1040, line 40; Form 1040A, line 27; or Form 1040NR,line 38

4

Enter the smaller of line 3 or line 4. If zero, stop; do not complete the rest of this form but doattach it to the childs return

5

5

A B

C

Single

Part I

(99) See separate instructions.

Before you begin: If the child, the parent, or any of the parents other children under age 14 received capital gains (includingcapital gain distributions), or qualified dividends, or farm income, see Pub. 929, Tax Rules for Children andDependents. It explains how to figure the childs tax using the Qualified Dividends and Capital Gain TaxWorksheet in the Form 1040 or Form 1040A instructions, or Schedule D or J (Form 1040).

Married filing jointly Married filing separately Head of household Qualifying widow(er)

2003

work actually done. It includes taxable interest, Example. Amanda Black, age 13, receivedAlternate Worksheet

dividends, capital gains (including capital gain the following income.for Line 1 of Form 8615distributions), the taxable part of social security

Dividends$600A. Enter the amount from the childs and pension payments, and certain distributionsForm 1040, line 22, or Form Wages$2,100from trusts. Investment income includes1040NR, line 23 . . . . . . . . . . . . amounts produced by assets the child obtained

Taxable interest$1,200

with earned income (such as interest on a sav-B. Enter the total of any net loss Tax-exempt interest$100ings account into which the child depositedfrom self-employment, any net

wages).operating loss deduction, any Capital gains $300

foreign earned income exclusion,Nontaxable income. For this purpose, in-

and any foreign housing exclusion Capital losses($200)vestment income includes only amounts thefrom the childs Form 1040 or

The dividends were qualified dividends on stockchild must include in total income. NontaxableForm 1040NR. Enter this totalgiven to her by her grandparents.investment income, such as tax-exempt interestas a positive number (greater

and the nontaxable part of social security andthan zero) . . . . . . . . . . . . . . . . Amandas investment income is $1,900. Thispension payments, is not included.

is the total of the dividends ($600), taxable inter-C. Add line A and line B andest ($1,200), and capital gains reduced by capi-Capital loss. A childs capital losses areenter the total. . . . . . . . . . . . . .tal losses ($300 $200 = $100). Her wages aretaken into account in figuring the childs invest-

D. Enter the childs earned income earned (not investment) income because theyment income. Capital losses are first appliedplus any amount from line 31 of

are received for work actually done. Her tax-ex-against capital gains. If the capital losses arethe childs Form 1040 or line 30

empt interest is not included because it is non-more than the capital gains, the difference (up toof the childs Form 1040NR. . . . .taxable.$3,000) is subtracted from the childs interest,

dividends, and other investment income. AnyGenerally, the childs earned Trust income. If a child is the beneficiary ofdifference over $3,000 is carried to the nextincome is the total of the amounts a trust, distributions of taxable interest, divi-year.reported on Form 1040, lines 7, dends, capital gains, and other investment in-

12, and 18 (if line 12 or 18 is a Income from property received as a gift. come from the trust are investment income toloss, use zero) or Form 1040NR, A childs investment income includes all income the child.lines 8, 13, and 19 (if line 13 or produced by property belonging to the child.

Adjustment to income. In figuring the19 is a loss, use zero)This is true even if the property was transferred

amount to enter on line 1, the childs investmentE. Subtract line D from line C. to the child, regardless of when the property was

income is reduced by any penalty on the earlyEnter the result here and on transferred or purchased or who transferred it.withdrawal of savings.Form 8615, line 1 . . . . . . . . . . .

A childs investment income includes incomeproduced by property given as a gift to the child.

Investment income defined. Investment in- This includes gifts to the child from grandparentscome is generally all income other than salaries, or any other person and gifts made under thewages, and other amounts received as pay for Uniform Gift to Minors Act.

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Illustrated Part II of Form 8615

Randy and his sister must each file Form8615. Their parents joint return informationis used on the Forms 8615 of both children.The net investment income on line 5 ofRandys Form 8615 is $2,280. His sistersnet investment income is $1,520. Randysparents taxable income is $50,570. Theirtax, from the Tax Table, is $6,886.

Part II of Randys Form 8615, with lines 6through 13 filled in, is shown here.

Randys parents taxable income of

$50,570 (from line 40 of Form 1040) isentered on line 6 of Form 8615.

Randys sisters net investment income of$1,520 (from line 5 of her Form 8615) isentered on line 7 of Randys Form 8615. Theamounts on line 5 ($2,280), line 6 ($50,570),and line 7 ($1,520) are added and the totalof $54,370 is entered on line 8.

The tax on $54,370 is found in the TaxTable using the parents joint filing status.The tax, $7,456, is entered on line 9.Randys parents tax of $6,886 (from line 41of Form 1040) is entered on line 10 and issubtracted from the amount on line 9. Thedifference, $570, is entered on line 11.

The amount on line 5 ($2,280) is dividedby the amount on line 12a ($3,800) and theresult, .600, is entered on line 12b.

Randys net investment income on line 5($2,280) is added to his sisters netinvestment income on line 7 ($1,520) andthe total, $3,800, is entered on line 12a.

The amount on line 11 ($570) is multipliedby the amount on line 12b (.600) and theresult, $342, is entered on line 13. This isRandys tentative tax based on his parents

tax rate.

50,570

1,52054,370

7,456

6,886

570

342

600

3,800

Tentative Tax Based on the Tax Rate of the Parent

Enter the parents taxable income from Form 1040, line 40; Form 1040A, line 27; Form 1040EZ,

line 6; TeleFile Tax Record, line K(1); Form 1040NR, line 38; or Form 1040NR-EZ, line 14. If zero

or less, enter -0-

6

6

Enter the total, if any, from Forms 8615, line 5, of all other children of the parent named

above. Do not include the amount from line 5 above

77

8Add lines 5, 6, and 7.8

9

Enter the tax on the amount on line 8 based on the parents filing status above (see instructions).

If the Qualified Dividends and Capital Gain Tax Worksheet or Schedule D or J (Form 1040) is

used, check here

9

10 Enter the parents tax from Form 1040, line 41; Form 1040A, line 28, minus any alternative minimumtax; Form 1040EZ, line 10; TeleFile Tax Record, line K(2); Form 1040NR, line 39; or Form 1040NR-EZ,line 15. Do not include any tax from Form 4972 or 8814. If the Qualified Dividends and Capital GainTax Worksheet or Schedule D or J (Form 1040) was used to figure the tax, check here 10

Subtract line 10 from line 9 and enter the result. If line 7 is blank, also enter this amount on line

13 and go to Part III

1111

12aAdd lines 5 and 712a

12b .Divide line 5 by line 12a. Enter the result as a decimal (rounded to at least three places)b

Multiply line 11 by line 12b13 13

Part II

and on line 1 of Form 8615. Line 2 is $1,500Line 2 (Deductions) Line 5 (Net Investment Income)because that is more than the sum of $750 and

If the child does not itemize deductions on A childs net investment income cannot be morehis directly-connected itemized deductions ofSchedule A (Form 1040 or Form 1040NR), enter than his or her taxable income. Enter on line 5$300.$1,500 on line 2. the smaller of line 3 or line 4 of Form 8615. This

is the childs net investment income.Example 2. Eleanor, age 8, has investmentIf the child does itemize deductions, enter onIf zero or less, do not complete the rest of theincome of $16,000 and an early withdrawal pen-line 2 the larger of:

form. However, you must still attach Form 8615alty of $100. She has no other income. She has

to the childs tax return. Figure the tax on theitemized deductions of $1,050 (net of the1) $750 plus the childs itemized deductionschilds taxable income in the normal manner.2%-of-adjusted-gross-income limit) that are di-that are directly connected with the pro-

rectly connected with the production of her in-duction of the investment income enteredvestment income. Her adjusted gross income,on line 1, or Step 2. Figuring a Tentativeentered on line 1, is $15,900 ($16,000 $100). Tax at the Parents Tax2) $1,500. The amount on line 2 is $1,800. This is the larger

Rate (Form 8615, Part II)of:Directly connected. Itemized deductions are The next step in completing Form 8615 is to1) $750 plus the $1,050 of directly connecteddirectly connected with the production of invest- figure a tentative tax on the childs net invest-itemized deductions, orment income if they are for expenses paid to ment income at the parents tax rate. The tenta-

2) $1,500.produce or collect taxable income or to manage, tive tax at the parents tax rate is the differenceconserve, or maintain property held for produc- between the tax on the parents taxable incomeing income. These expenses include custodian figured with the childs net investment incomefees and service charges, service fees to collect (plus the net investment income of any otherLine 3taxable interest and dividends, and certain in- child whose Form 8615 includes the tax returnvestment counsel fees. Subtract line 2 from line 1 and enter the result on

information of that parent) and the tax figuredthis line. If zero or less, do not complete the rest without it.These expenses are added to certain otherof the form. However, you must still attach Form When figuring the tentative tax at themiscellaneous itemized deductions on Schedule8615 to the childs tax return. Figure the tax on parents tax rate, do not refigure any of theA (Form 1040). Only the amount greater thanthe childs taxable income in the normal manner. exclusions, deductions, or credits on the2% of the childs adjusted gross income can be

parents return because of the childs net invest-deducted. See Publication 529, Miscellaneousment income. For example, do not refigure theDeductions, for more information.

Line 4 (Childs Taxable Income) medical expense deduction.Figure the tentative tax on lines 6 through 13.Example 1. Roger, age 12, has investment

Enter on line 4 the childs taxable income from For an example, see the Illustrated Part II ofincome of $8,000, no other income, no adjust-Form 1040, line 40; Form 1040A, line 27; or Form 8615.ments to income, and itemized deductions ofForm 1040NR, line 38.$300 (net of the 2%-of-adjusted-gross-income

limit) that are directly connected with his invest-ment income. His adjusted gross income is$8,000, which is entered on line 35 of Form 1040

Page 13


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If the child, parent, or any other child has netLine 6 (Parents Taxable Income) J. Enter the amount from line 1 ofcapital gain, figure the amount of net capital gain the childs Form 8615 . . . . . . . .

Enter on line 6 the amount from the parents included on line 8 by adding together the netK. Divide line A by line J (but doForm 1040, line 40; Form 1040A, line 27; Form capital gain amounts included on lines 5, 6, and

notenter more than 1) . . . . . . .1040EZ, line 6; TeleFile Tax Record, line K(1); 7 of Form 8615. If the child, parent, or any otherForm 1040NR, line 38; or Form 1040NREZ, child has qualified dividends, figure the amount L. Divide line B by line J (but doline 14. If the parents taxable income is zero or of qualified dividends included on line 8 by ad- notenter more than 1 minusless, enter zero on line 6. ding together the qualified dividend amounts the amount on line K) . . . . . . . .

included on lines 5, 6, and 7. Use the followingM. Multiply $750 by line K . . . . . . .

discussions to find these amounts.Line 7 (Net Investment Income of N. Multiply $750 by line L . . . . . . . .

Net capital gain or qualified dividends onOther Children)O. Qualified dividends on line 5.line 5. If the child has a net capital gain or

Subtract line M from line I (butqualified dividends, use the appropriate work-If the tax return information of the parent is alsodo not enter less than zero orsheet below to find the amount of each includedused on any other childs Form 8615, enter onmore than the amount on line 5on line 5. These worksheets are needed to ad-line 7 the total of the amounts from line 5 of allof Form 8615) . . . . . . . . . . . . . just the childs net capital gain and qualifiedthe other childrens Forms 8615. Do not include

dividends by the appropriate allocated amount P. Net capital gain on line 5.the amount from line 5 of the Form 8615 beingof the childs deductions. Subtract line N from line H (butcompleted.

do not enter less than zero orUse the following worksheet only if

more than the excess of FormExample. Paul and Jane Persimmon have line 2 of the childs Form 8615 is8615, l ine 5, over l ine O) . . . . . .three children, Sharon, Jerry, and Mike, who $1,500 and lines 3 and 5 are the same

must attach Form 8615 to their tax returns. The amount.Use the following worksheet only ifchildrens net investment income amounts online 5 of the childs Form 8615 is lessline 5 of their Forms 8615 are: Line 5 Worksheet #1 than line 3.

Sharon$800 A. Enter the childs qualifieddividends . . . . . . . . . . . . . . . . Line 5 Worksheet #3 Jerry$600

B. Enter the childs net capital gain A. Enter the childs qualified Mike$1,000dividends . . . . . . . . . . . . . . . .C. Enter the amount from line 1 of

the childs Form 8615 . . . . . . . .Line 7 of Sharons Form 8615 will show B. Enter the childs net capital gain$1,600, the total of the amounts on line 5 of D. Divide line A by line C (but do C. Add lines A and B . . . . . . . . . . .Jerrys and Mikes Forms 8615. not enter more than 1) . . . . . . . .

D. Divide line A by line C . . . . . . . .Line 7 of Jerrys Form 8615 will show $1,800E. Divide line B by line C (but do

($800 + $1,000). E. If the child itemized deductions,not enter more than 1) . . . . . . . .Line 7 of Mikes Form 8615 will show $1,400 enter the childs itemized

F. Multiply $1,500 by l ine D . . . . . .($800 + $600). deductions directly connected withthe production of the income onG. Multiply $1,500 by l ine E . . . . . .line C . . . . . . . . . . . . . . . . . . .Other childrens information not available.

H. Qualified dividends on line 5.If the net investment income of the other children F. Multiply line D by Line E . . . . . .Subtract line F from line A (butis not available when the return is due, either file do not enter less than zero or G. Subtract line F from line E . . . . .the return using estimates or get an extension of more than the amount on line 5time to file. Estimates and extensions are dis- H. Subtract line G from line B . . . . .of Form 8615) . . . . . . . . . . . . .cussed earlier under Providing Parental Infor-

I. Subtract line F from line A . . . . .I. Net capital gain on line 5.mation (Form 8615, Lines AC).Subtract line G from line B (but J. If the child can claim his or herdo not enter less than zero or own exemption, enter $3,050*.more than the excess of Form Otherwise, enter zero . . . . . . . .Line 8 (Parents Taxable Income8615, l ine 5, over l ine H) . . . . . .

Plus Childrens Net Investment K. If the child itemized deductions,Income) enter the childs itemizedUse the following worksheet only if

deductions notdirectly connectedline 2 of the childs Form 8615 is moreEnter on this line the total of lines 5, 6, and 7. with the production of the incomethan $1,500 and lines 3 and 5 are theYou must determine the amount of net capital on line C. Otherwise, enter thesame amount.gainand qualified dividends included on this childs standard deduction . . . . .line before completing line 9 of Form 8615.

L. Add lines J and K . . . . . . . . . . .Line 5 Worksheet #2Net capital gain. Net capital gain is the

M. Enter the childs adjusted grossA. Enter the childs qualifiedsmaller of the gain, if any, on line 16 of Scheduleincome (line 35 of Form 1040, linedividends . . . . . . . . . . . . . . . .D or the gain, if any, on line 17a of Schedule D. If 22 of Form 1040A, or line 34 of

Schedule D is not required, it is the amount on B. Enter the childs net capital gain Form 1040NR) . . . . . . . . . . . . .

line 13a of Form 1040 or line 10a of Form C. Add lines A and B . . . . . . . . . . . N. Divide line C by line M (but do1040A.not enter more than 1) . . . . . . . .D. Divide line A by line C . . . . . . . .

Qualified dividends. Qualified dividendsO. Multiply line L by line N . . . . . . .E. Enter the childs itemizedare those dividends reported on line 9b of Form

deductions directly connected1040 or Form 1040A. P. Multiply line O by line D . . . . . . .with the production of the childs

Q. Subtract line P from line O . . . . .qualified dividends or net capitalNet capital gain and qualified dividends on

gain . . . . . . . . . . . . . . . . . . . . R. Qualified dividends on line 5.line 8. If neither the child nor the parent norSubtract line P from line I. EnterF. Multiply line D by line E . . . . . . .any other child has net capital gain, the netthe result here (but do not entercapital gain on line 8 is zero. G. Subtract line F from line E . . . . . less than zero or more than the

If neither the child, nor the parent, nor any amount on line 5 of Form 8615)H. Subtract line G from line B . . . . .other child has qualified dividends, the amountof qualified dividends on line 8 is zero. I. Subtract line F from line A . . . . .

Page 14


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2) On line 2, enter the amount of qualifiedS. Net capital gain on line 5. 7. Enter the amount, if any, from line

dividends included on line 8 of Form 8615.Subtract line Q from line H (but 13b of the parents Form 1040 or(See the earlier discussion for line 8.)do not enter less than zero or line 10b of the parents Form

more than the excess of Form 1040A . . . . . . . . . . . . . . . . . .3) On line 3, enter the amount of the net8615, l ine 5, over l ine R) . . . . . .

capital gain included on line 8 of Form 8. Enter the amount, if any, from line2 of this Qualified Dividends and8615. (See the earlier discussion for line* If you enter more than $139,500 on line M, seeCapital Gain Tax Worksheet . . . .8.)Deduction for Exemptions Worksheet Line 39in

the Form 1040 instructions for the amount to enter 9. Add lines 5, 6, 7, and 8. Also enter4) Complete lines 4 through 29 (line 27 of theon line J.this amount on lines 11 and 19 ofworksheet in the Form 1040A instructions)this Qualified Dividends and

following the worksheet instructions. UseCapital Gain Tax Worksheet (lines

Net capital gain or qualified dividends on the parents filing status to complete lines

9 and 17 if the worksheet is fromline 6. If the parent has a net capital gain, its 8, 26, and 28 (lines 6, 24, and 26 of the the

Documents

US Internal Revenue Service: p929--2003